Triumph To Buy Vought Aircraft For $1.44 Bln In Cash, Stock

Aircraft components maker Triumph Group, Inc. Tuesday said it reached a definitive deal to buy Vought Aircraft Industries, Inc. from private equity firm Carlyle Group for cash and stock consideration of $1.44 billion including the retirement of Vought debt. The purchase consideration to Vought shareholders includes $525 million of cash and about 7.5 million shares.

Dallas, Texas-based Vought manufactures aerostructures for commercial, military and business jet aircraft. The company's products include fuselages, wings, empennages, nacelles and helicopter cabins. In 2009, the company's sales were $1.9 billion. Over 80% of the company's revenue is from long-term contracts.

Vought's customer base is comprised of aerospace original equipment manufacturers worldwide. Major platforms include the Boeing 747-8, Boeing 767, Boeing 777, Airbus A330/340, Boeing C-17, Boeing V-22, Northrop Grumman Global Hawk and Gulfstream G450 and G550.

Triumph, based in Wayne, Pennsylvania, serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.

Triumph stated that it expects to fund the transaction with a combination of current and new credit facilities. The company has also obtained certain financing commitments. The deal is expected to be closed in July. After the closing of the deal, Carlyle will own about 31% of the outstanding stock of Triumph, subject to certain lock up provisions. Triumph also stated that the acquired business will operate as Triumph Aerostructures -Vought Aircraft Division, LLC.

The deal is expected to have an earnings accretion of more than $1.00 per share on a full-year run-rate basis. This estimate reflects initial forecast of purchase accounting adjustments and excludes synergies from the acquisition and transaction-related expenses. Pro forma for the acquisition, Triumph will have approximately $3.1 billion of revenue and pro forma adjusted EBITDA of approximately $446 million for the twelve months ended December 31, 2009.

Commenting on the deal, Richard Ill, Triumph's Chairman and Chief Executive Officer said, "The integration of Vought with Triumph will create a leading Tier One Capable supplier with strong positions in commercial and military platforms. The combination of Vought with Triumph will enhance Triumph's products and system offerings to the benefit of our customers, suppliers, employees and investors."

Triumph said RBC Capital Markets acted as exclusive financial advisor and provided a fairness opinion to the company's Board of Directors. RBC also provided committed acquisition debt facilities for the transaction. Further, Triumph stated that Wachtell, Lipton, Rosen & Katz provided legal advice to the company.

On March 1, Triumph announced the acquisition of Fabritech Inc., a component manufacturer and repair station for critical military rotary-wing platforms. The acquired business will operate as Triumph Fabrications-St. Louis and be part of Triumph Aftermarket Services Group. Triumph expects that Fabritech will add approximately $25 million of revenue for fiscal 2011 and will be immediately accretive to earnings.

This article can be found on rttnews.com